Purpose: This dissertation focuses on the effects of reward systems on employee performance in the modern work environment and how satisfaction with rewards can lead to higher performance and better job satisfaction.Based on a critical review of published literature, it is clear how important the right combination of rewards is to the performance of an organization.Employees should always be aware of the relationship between their level of performance and how they are rewarded for that performance.The purpose of this study is to measure the impact of incentives on employee performance.Methodology: A questionnaire was designed to collect the data on the factors related to compensation like salary, rewards, Indirect Compensation and employee performance.Findings: It is founded from different results that Incentives has positive impact on employee performance.It is proved from correlation analysis that all the independent variables have weak or moderate positive relationship to each other.Regression analysis shows that all the independent variables have insignificant and positive impact on employee performance.Descriptive analysis also reveals that all the independent variables have positive impact on employee performance.Suggestion: These findings also suggested that although intrinsic rewards can be highly valued by employees, for some managers a combination of extrinsic and intrinsic rewards can have a positive effect on performance and motivation.But deciding on the reward package for an individual manager can sometimes prove difficult.Conclusion: This dissertation aimed to determine what impact rewards systems within organizations have on performance.As discussed in the introduction to this research, we have seen a shift from a very narrow based reward structure involving only pay, to one which incorporates other rewards, both intrinsic and extrinsic, which are valued by the modern day workforce.It is concluded from different results that Incentive has positive impact on employee performance.It is proved from correlation analysis that all the independent variables have weak or moderate positive relationship to each other.Implication: This dissertation was not intended to be a comprehensive or collective study of all aspects of rewards but rather those most relevant to the organization in question.Also the impact of rewards on motivation, although not in the specific scope of this research, could have been more comprehensive.Lack of time has been an element in the collection of data and information for this dissertation.